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CSCE coffee creeps higher on local, spec buying

NEW YORK: CSCE coffee futures ended slightly higher on Monday, with speculators and locals on both sides of the market, which saw a lack of origin selling, traders and brokers said.

Key March KCH0 arabica inched up 0.70 cent to 111.90 cents a lb, trading 114.40-110.95 cents.May KCK0 rose 0.60 cent to close at 114.80 cents a lb, whilst back months increased by 0.65-0.90 cent.

March arabicas opened lower than predicted but were supported by speculative and local buying, which coupled with a lack of selling and light roaster interest, allowed prices to reach intraday highs, brokers said.

"We saw an upward move today on a little bit of spec (speculative) buying.A little bit of industry/trade buying came in, but very little origin...so we had a little room to move up," one Miami-based broker said.

But local and speculative selling then gradually eroded prices throughout the afternoon, as coffee futures continue to trade in a sideways pattern, although technically the market looks weaker.

"The technical picture is weak.We're trying to build a floor here around 110.50-110.80.but you may get some stops underneath the market, which will not only fill the gap, but probably extend the gap," one broker said.

Traders and brokers said a lack of fundamental news also explained coffee's current sideways trading pattern.

CSCE coffee prices have been shunted back and forth in a tight range over the past week or so, as speculators and locals try to test the lower and upper end of the market.

It is widely believed that there are significant sell stops beneath key 110-cent support, which could precipitate a slide to lower levels.

Technicians said that resistance for key March contract was around 118-120 cents.Support was pegged at 110-109.50 cents.

Volume traded reached an estimated 8,442 lots on Monday, against Friday's official volume of 8,412 lots previously. Call volume reached an estimated 2,127 lots, whilst puts were seen at 883 lots.-Reuters